Comment: Ministerial directions come into sharper focus thanks to the Scottish ferry fiasco

There comes a point when a party has been in power a long time and its critics claim that the civil service has gone native.

This happened with Margaret Thatcher and Tony Blair. Thatcher certainly set out to radically reform the service, in order to make it ‘one of us’.

In May 1980, Thatcher invited all Whitehall permanent secretaries to a dinner in Downing Street. The dinner was unprecedented, but even more of a surprise was Thatcher’s speech to the assembled heads of the civil service.

She told them they were part of the cause of Britain’s decline. According to some accounts, at one point Sir Frank Cooper, who was head of the Ministry of Defence at the time, had to leave the room briefly, provoking a colleague to whisper to his neighbour that he hoped Sir Frank had gone to get the SAS to “get us out of the building”. The dinner had taken place the day after SAS officers had dramatically abseiled into the Iranian Embassy in London to release the hostages.

This is but one of the stories of incoming politicians feeling undermined by the dead hand of Whitehall. Thatcher set out to reform the civil service, introducing measures – many taken for granted today, such as opening up senior positions to outsiders – and came to be accused of having politicised the civil service.

The Thatcherised civil service, it was thought by some, would be a problem for any incoming Labour Government, but in fact Tony Blair’s reforms were enacted with little trouble. The Treasury, which had been hostile to devolution and did much in the 1970s to undermine even that most modest of proposed measures, buckled under Labour’s electoral mandate.

In time, Labour would be accused of politicising Whitehall. It is almost a law of politics that whenever a party has been in power for many years, it is accused of turning the civil service into ‘one of us’. It is no surprise to hear such claims now in Scotland.

The SNP’s plans for the civil service in 2007 were limited. There was a commitment in its 2007 manifesto to seek “early discussions on the creation of a wholly devolved Scottish civil service on the same model and basis as the Northern Irish civil service”. But that was not pursued. There are a number of explanations.

First, the civil service managed the transition from a Labour-LibDem coalition to minority SNP government well. It is also likely that the SNP soon realised that officials were not uniformly unionist and those with views different from the ministers were capable of professional impartiality. They may also have realised that the Northern Ireland civil service might not be the greatest model to follow.

It transpired that senior officials and some in the SNP had reached similar conclusions on reform. While most commentary focused on the change of name from Scottish Executive to Scottish Government – a change that had previously been mooted by Henry McLeish as First Minister – more important changes focused on addressing silo working and reducing the number of priorities (‘if everything is a priority then nothing is a priority’ was the mantra). There was no effort to create a separate Scottish civil service. The civil service would remain a retained matter.

The appointment of Sir Peter Housden as permanent secretary in 2010 was notable. Housden, who had held the same role in the Office of the Deputy Prime Minister under John Prescott, had no background in Scottish matters but had the support of then First Minister Alex Salmond.

Housden, who was a beneficiary of the opening up of the civil service, had spent his career in local government, where a very different relationship exists between elected members and officials. Being permanent secretary during the independence referendum was bound to present challenges no predecessor had faced.

There were predictable accusations that he had gone native.  The Commons’ Public Administration Committee produced a report –Lessons for Civil Service impartiality from the Scottish independence referendum – in 2015. It concluded that parts of the Scottish Government’s independence white paper “should not have been included in a government publication”.

“Civil servants should always advise against the appearance of partisan bias in government documents—and they should not be required to carry out ministers' wishes, if they are being asked to use public funds to promote the agenda of a political party, as was evident in this case. At the very least, Sir Peter Housden, Scotland's Permanent Secretary, should have required a letter of direction,” it continued.

The report was also critical of Sir Nicholas Macpherson, Treasury Permanent Secretary, for his interventions on the currency issue. It noted that his advice “suited ministers’ political objectives in respect of the Scottish referendum”. “The [UK] Government in response to this report must make it clear that this will never recur,” it added.

Clipping official wings lay behind the deliberations. During the course of the inquiry, committee chair Sir Bernard Jenkin appeared as much concerned about Whitehall’s prospective bias in a future Brexit referendum as the Scottish independence referendum.

This takes us to recent reports suggesting that officials in the Scottish Government have been too close to the SNP, evidenced by the lack of ministerial directions to officials since the SNP came to power. But what are ministerial directions and should we be concerned about their use or lack of use?

Senior civil servants are accountable officers, responsible for spending public money within established rules and guidance. Ministerial directions are usually seen as evidence that something has gone wrong, not evidence that the system is working well, but they can be a sign, if required rarely, that the civil service is performing its professional role well.

The Cabinet Manual – the official guide to laws, conventions and rules on the operation of government – explains that “where an accounting officer objects to a proposed course of action of a minister on grounds of propriety, regularity or value for money relating to proposed expenditure, they are required to seek a written ministerial direction”.

Home secretary Priti Patel issued a ministerial direction on the scheme to send Ukrainian refugees to Rwanda against advice from her officials, who were unable to quantify the costs or benefits of the policy. Former Prime Minister Theresa May, not noted for her soft touch on immigration, criticised the policy on the grounds of “legality, practicality and efficacy”, mirroring the reasoning behind the official concerns that led to Patel’s Ministerial Direction.

Gus O’Donnell, a former head of the UK civil service, has described ministerial directions as the “nuclear option” for a senior official. Their use does not mean that the decision is blocked, but that the minster makes the decision and accepts full responsibility. Indeed, ministers have a democratic mandate that officials lack allowing them to take political risks.

If, at some point, it becomes clear that Patel’s decision was as Theresa May states then Patel should take the consequences. That at least is the theory. The reality, however, is that accountability has been undermined under the Johnson government to an unprecedented degree. The unwritten rules of the constitution, the hidden wiring or ‘good chaps’ theory of government, as the academic Peter Hennessy has called them, have been exposed as inadequate.

Until this egregious example, probably the most famous case was in 1991, when Tim Lankester, Permanent Secretary of the then Overseas Development Agency, informed then foreign secretary Douglas Hurd that funding for the Pergau Dam in Malaysia was not best use of money for economic development purposes. Hurd considered this, but realised that three years previously Margaret Thatcher had made a commitment to the project to the Malaysian prime minister. Though John Major had replaced Thatcher as prime minister, Hurd decided to issue a direction.

Pergau become one of the great British scandals, with millions spent on a project that proved uneconomic and was linked to a secret arms deal. Lankester’s refusal to sign off the deal without ministerial direction was revealed by the National Audit Office. This brought the affair to public and parliamentary attention, reminding us of the vital role of audit in political accountability.

If ministerial directions become normalised this ought to concern us, as it suggests a major breakdown in the system of government. If few, or even no, directions are issued by ministers then it most certainly does not mean there is a problem. We should expect them to be rare.

But not all ministerial directions imply a break down in the relationship with officials or are required, as in the Pergau or Rwanda cases above. There are occasions when a formal direction is required. They may be needed when quick action is required – and it should not surprise us to find this occurs during crises, though that is no excuse for the abuse involving large sums of money being filtered to cronies.

They may be required when an official is uncomfortable with a proposal. In 2010, in his former role in Whitehall, Peter Housden requested ministerial directions when concerned about creating some English unitary councils and approving regional development agency funds in Blackpool. John Denham, as responsible minister, listened but disagreed with his permanent secretary’s analysis and pressed ahead by issuing a ministerial direction. Denham’s view had been that it was his right as an elected politician appointed by the prime minister to make the final judgement, as indeed it was.

Ministerial directions may occur in the run-up to an election. This might reflect decisions officials are uncomfortable with which are designed to win votes rather than having public policy merit. Such officials may be concerned that they may have to justify such decisions on the other side of the election when another party comes to power.

Does the lack of ministerial directions mean that all is fine and well in the Scottish Government, that ministers’ relations with officials are healthy and professional? Does it mean that Scotland has well-oiled, efficient machinery of government? The answer will not be found by looking only at the number of ministerial directions and, indeed, there are more important matters that warrant attention. It could be that ministers are timid, that there is a lack of bold decision making that would require some risk. But the SNP has not been averse to populist policies that might have been expected to require ministerial directions (and not just pre-election bribes of the sort that are not uncommon from all parties).

But there is at least one major policy decision on which there is at least a prima facie case for officials to request a ministerial direction or at least some other major dysfunction in the system of government. There is a striking line in the recent Audit Scotland report into the 2015 award of two ferry contracts to Ferguson Marine that raises a number of questions: “There is insufficient documentary evidence to explain why Scottish ministers accepted the risks and were content to approve the contract award in October 2015.”

What role did officials play? What advice was offered? Was there ever any thought to requiring a ministerial direction? Perhaps not and perhaps for good reason. But we do not know, as yet. A ministerial direction that had not been recorded is, quite simply, not a ministerial direction. By definition, it must be written as the Scottish Ministerial Code makes very clear.

The Scottish Ministerial Code states: “Accountable officers have a particular responsibility to see that appropriate advice is tendered to ministers on all matters of financial propriety and regularity and on the economic, efficient and effective use of resources. If ministers are contemplating a course of action which the accountable officer considers would breach the requirements of financial regularity or propriety, the accountable officer must set out in writing his or her objection to the proposal, the reasons for the objection and his or her duty to inform the Auditor General for Scotland should the advice be overruled.

“If ministers decide nonetheless to proceed, the accountable officer must seek written authority to take the action in question and must send the relevant papers to the Auditor General for Scotland and to the clerk to the Public Audit and Post Legislative Scrutiny Committee as soon as possible. The same procedure applies where the accountable officer considers that ministers are contemplating a course of action which he or she could not defend as representing value for money within a framework of best value. The procedure enables the Public Audit and Post Legislative Scrutiny Committee to see that the accountable officer does not bear personal responsibility for the actions concerned.”

A more open system of government is vital. Transparency and rigorous systems of accountability make decision-makers more careful with public money. There is also a downside: it may also make them more risk averse.

Parliamentary committees in the Commons have more teeth than in Holyrood. The prospect of facing a parliamentary committee with a chair who does not owe her position to her leader, including the prime minister, will create more accountable government. Appearing before the Commons Public Accounts Committee concentrates official minds. Scottish Government officials know they may be called before Holyrood committees but are likely to be much more relaxed about this than their equivalents south of the border before Commons’ committees.

The focus on the lack of Scottish ministerial directions has stimulated discussion on relations between ministers and officials, but ministerial directions are really only the tip of the iceberg. We should be worried when these become frequent and suspicious when never used. Frequency implies a breakdown in relations.  Absence suggests civil servants have become subservient, fearful of challenging ministers and/or not too fearful of scrutiny by parliamentary committees.

This is an important area even if another independence referendum seems a distant prospect. Contingency planning is an important though rather neglected part of official responsibility. We do need clear guidelines on what is permitted. This applies equally to the UK Government. There is something disturbing when an official can say this on receiving an award for work “trying to save the union”.

Wider issues should not be ignored. The government was unable to appoint two crucial directors general last year and that ought to have run alarm bells. Capacity rather than partisanship is much more of a problem. The capacity of the Scottish Government in areas such as the economy should worry us. Scotland’s economic performance lags behind the UK as a whole, especially now that public finances are linked to economic performance. The capacity of Holyrood to scrutinise the Scottish Government should also be a concern especially as more competences have been devolved.

There are other matters that have raised eyebrows among seasoned observers. Should senior officials active on social media appear to be endorsing policy decisions? What message does this send to others? To what extent does the Scottish Government encourage diversity of opinions to match its focus on other forms of diversity?

We need officials to feel comfortable raising awkward questions.